A major city with a booming market for new office space is, at the same time, drowning in vacant old office space. Sound ironic? This Catch-22 is the plight of modern Rotterdam, the Netherlands’ second-largest city.
One truism of real estate is that vacancy breeds vacancy—a vacant building often leads to decreases in value and ensuing vacancies in the surrounding buildings. Thus it is understandable that the rash of vacancies has spread quickly across the Netherlands, which now has a whopping 18.5% office vacancy rate.
The Netherlands holds a dubious honor—the country has Europe’s highest office vacancy rate, with more than 7.5 million square meters of empty office space. Worse still, more than half of that office space has been unclaimed for more than three years.
The office space issue has been brewing for a long time in the Netherlands—the first signs of an unusable overabundance came in the 1990s. However, the IT industry boomed in the Netherlands that decade, and as demand for office space skyrocketed, many vacancies were filled and the problem was, for some time, fixed. However, during the IT bubble burst of the early 2000s, the demand for vacant offices dropped sharply. Many companies downsized, and either outsourced their labor or built new, smaller offices better suited to company needs.
Some existing vacancies are in a no man’s land—they have not been demolished and have few prospects of occupation in the near future. As offices in the country become smaller and the 2008 global recession’s effects continue to linger, development has stalled on these unused spaces.
It may thus seem curious that the market for new real estate in Rotterdam is booming. Older buildings are not in demand—given the choice, a vast majority of business owners and developers are seeking new spaces. The reason is simple—the vacant office spaces often have not been well maintained over the years, and many need renovations for modern-day use. Structural limitations and a lack of such conveniences as elevators and accessibility make many empty spaces hard sells for prospective buyers.
Brighter times may be ahead in Rotterdam—as an increasing number of entrepreneurs and architects head for the city, the pressure to make use of or replace the vacant office spaces rises. The city’s crisis in wasted space may be a problem now, but it spells opportunity for ambitious planners and developers!
Office Space Planners always welcomes an opportunity to create high-quality working space—take a look at Office Space Planners’ website, and get a free quote on a project of your choosing today!